RE:100:1 Roll upLire1 Personally, I am not against a roll-up, and I am impressed (very) with what management (and the very committed workforce) are achieving. However, what I am uncomfortable with is the ratio of the roll-up; 100-1 seems to me to go further than is necessary to achieve, what you suggest is “pretty cosmetic” and “presents a better image for future potential structural changes as I understand that everything from analysts' coverage to potential partnerships or mergers can be discouraged by a stock trading in pennies.”.
I understand the pennies point, but to go from pennies to high dollars – at yesterday’s close 100-1 would mean market price of $8.50 – is too much of a consolidation in my opinion. I think it would result in an unnecessary tightening of trading liquidity on the market. Surely a 25 -1 or 50 -1 (i.e $2.12 or $4.25) consolidation would achieve the respectability needed for the partnerships/mergers you talk about.
I just don’t think existing shareholders’ interests would be best served by such a dramatic consolidation. The loss of liquidity in the market, I believe is a significant issue. I should imagine the Register of Shareholders contains a lot of small holdings, from the days when BQE was riding high at circa $1.30. Some of these will be squeezed to owning low 100s of shares, even low 10s. What will be the effects of them bailing out be? – to them, and to the share price? If Management go this route, in my opinion they will need a mechanism for buying up such small lots, or the price could drop, and I’m not sure there is currently enough market interest in BQE to avoid one.
What I would like to learn, is Management’s full reasoning for such a dramatic roll-up, and what they think will be the advantages of going from a share float of 120 million shares, to 1.2 million, and what they think the effect on the share price will be. I just think 100-1 is unnecessarily dramatic.